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CapitaMalls Asia: At support.

Monday, April 25, 2011

CapitaMalls Asia retreated 5c or 2.7% today, closing at $1.79 after touching a low of $1.78. Question on the minds of many people would be whether it would go lower? Who knows for sure? Looking at the daily chart, it is clear that $1.78 is an important support defined by the 50dMA as well as the 61.8% Fibo fan line.

Looking at the ADX, the suggestion is that there is no trend per se. In such a situation, look to the Stochastics and we see that it is gently declining but it is not oversold. Look then to the OBV and it does not show any distribution. In fact, since 15 March, the picture is more of accumulation than distribution. The volume today was not very heavy although a black candle was formed. 

If we believe that CapitaMalls Asia has gone into a range as suggested by the horizontal orientation of the Bollinger bands, then, buying at the lower end of the range would make sense if it should happen at all. That is at $1.72. Keep an eye on $1.78. If it does not break, we could see price going higher and breaking the longer term trendline resistance eventually.

Why am I sanguine about the situation? If we look at the weekly chart, since the week of 14 March, in weeks when white candles were formed, trading volume was higher than in weeks when black candles or dojis were formed. This is encouraging for the bulls. The pull back is possibly a chance for accumulation.


ortho said...

Will you be accumulating at $1.78? :D

AK71 said...

Hi ortho,

My last purchase was at $1.80. $1.78 is only 2c away. So, I am not tempted. ;-p

ortho said...

Not sure if it is advisable to get more at $1.72? :p

AK71 said...

Hi ortho,

I just do what the charts show me to do and I have already put in a buy queue at $1.72. Could it happen? Your guess is as good as mine. ;p

ortho said...

Looks like the price quite stable today... did not able to execute my buy Q :(

Anonymous said...

Dear Ak

price has gone to as low as $1.68 today, will it head south even more?

i got in at $1.79.
wondering if i shd average down.


AK71 said...

Hi Confused,

I put in two overnight buy orders, one at $1.70 which was filled and one at $1.68 which, although was touched, was not filled today. Could the price go lower? Why not? I will see if the support at $1.68 holds up.

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